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[topic] Lawsuit - July 31 to mid-August

Nov 24, 2009 18:02

On July 31, Jaejoong, Yoochun, and Junsu filed a lawsuit for provisional disposition to invalidate the exclusivity clause in their contract with SM Entertainment. They also filed a preservation of evidence request which would require SM Entertainment to turn over a ton of paperwork related to TVXQ's earnings to the court. This post will cover the period from July 31 through part of August, during which the initial media flurry and press conferences occurred.



July 31, 2009 - Jaejoong, Yoochun, and Junsu file a lawsuit against SM Entertainment
JJY filed for provisional disposition to invalidate the exclusivity clause in their contracts, and for a preservation of evidence request on July 31. Initially, some misinformation came out due to all the news sources trying to get stories out as quickly as possible. One very early article by CBS, for instance, stated that Changmin & Yunho were in the process of doing the same. This was retracted pretty soon thereafter, obviously. Keep in mind that most of the early translated information coming out was little more than hysterical flailing, with very little actual article translation, and most of it got deleted off of lj communities. Some Korean fans tried to make authoritative statements, but they were all speculation (but harmless and meant to calm people down), so they're not included here.

Sources: Who Said What?
  • JJY says: show us the money.
  • SM says: n/a
Reliability of Source(s)
  • As discussed above, some erroneous information was bound to come out, but by and large these articles can be considered to contain an accurate accounting of the system.
  • One point which is never quite clear is a matter of wording over whether the provisional disposition seeks to invalidate just the exclusivity clause in the contract or invalidate the contract as a whole. More on this later.

July 31 - August 1, 2009 - Fake UFO replies from Jaejoong & Changmin
A screencap of UFO replies depicting encouraging replies from Jaejoong & Changmin circulated. Fans later said the screencap was fake.

Sources: Who Said What?
  • JJY says: n/a
  • SM says: n/a
  • Fans say: it's a graphic made to look like a screencap of UFO replies
Reliability of Source(s)
  • The mods haven't seen the original UFO board and thus can't totally vouch. It's accepted in fandom that the replies in the graphic were never posted and the graphic was doctored to look like a screencap of UFO replies.
  • However, if I was Jaejoong & Changmin and I did make those replies and then later realized it was a stupid move, I'd delete them, start a screencap going around, and then proclaim the screencap is fake. Just sayin'.
  • But yeah, they were probably fake. LOL

August 1, 2009 - SM says "TVXQ's activities must continue"
On August 1, SM made a quick statement that it was vital that TVXQ's activities be allowed to continue. On August 3, they began responding to the allegations made in JJY's press conference.

Sources: Who Said What?
  • JJY says: n/a
  • SM says: we're puzzled and saddened by this lawsuit; TVXQ's activities must continue for the good of Korea; the conflict is over profits JJY earned from their CreBeau involvement.
Reliability of Source(s)
  • This statement is probably an accurate portrayal of SM's statement, however...
  • ...the wording about JJY's involvement with CreBeau is interesting because implies SM is concerned not with JJY's actual involvement with CreBeau (as they later claim), but with the money JJY earned from CreBeau. PR-wise, the former would sit much better with the general public than the latter. It's hard to determine the significance of this phrase because it may be a question of translation wording. Or, if you notice, the words are not part of a quote from SM, they are the reporter's interpretation of what SM said. So, it's food for thought but inconclusive. It would be really nice to see additional articles on this subject translated to help determine if this shift-in-PR-strategy idea holds any water.
  • We mods think it's pretty inconceivable that SM was puzzled by this turn of events. Nice try, though.
August 1~, 2009 - Early fan and public reactions to the whole situation
Some very interesting cultural perspectives in some of the articles of the "TVXQ cannot disband because it would be bad for Korea" variety. Wow, pressure much? :(

Sources: Who Said What?
  • These are opinion and reaction pieces.
Reliability of Source(s)
  • As opinion pieces, they are simply reacting to information they've heard, accurate or not.

August 2, 2009 - JJY's representative announces August 3 press conference

Sources: Who Said What?
  • JJY says: we'll talk on August 3.
  • SM says: n/a
Reliability of Source(s)
  • JJY's press conference was held on August 3.

August 3, 2009 - JJY reveal reasons for the lawsuit, deny disbandment rumors
On August 3, JJY held a press conference, and revealed through their lawyer, Lim Sang-hyuk of the firm Sejong, their reasons for the lawsuit. This was actually preceded by a phone interview between Mr. Lim and the reputable JoongAng Ilbo on August 1 (listed first below). The gist of the message is the same.

Sources: Who Said What?
  • JJY says:
    • We have been physically and mentally overworked, and are exhausted
    • 13-year contract does not include military service and is a slave contract
    • Received no payment if album sales under 500,000; 10 million won if over (amended Feb 2009) (unclear if this means 10 million won apiece or collectively)
    • Even since Feb 09, receive ~0.4-1% apiece for album sales
    • We tried to work with SM on this issue
    • This has nothing to do with CreBeau; we are not so stupid as to throw everything away over a $1 million/$100 million** investment in a Chinese cosmetics company; SM is trying to throw attention off the real issues
    • We do not wish to disband and will follow through with our obligations
    • We're sorry to our fans and hope to mature through this experience
  • SM says: n/a
  • JoongAng Daily article consultants say:
    • For a group of 4-5 members, ~10-15% income distribution ratio is standard, with each member receiving ~2-3% apiece
    • 13 years is too long for a contract, even factoring in the trainee period investment
    • But, FTC's 7-year contract length guideline does not apply in the case of artists with overseas activities
Reliability of Source(s)
  • ** Two different translations, two different numbers. Can someone verify if either of these is correct? I think we can discount the 100 million as definitely wrong, but 1 million? If that's correct, it totally contradicts claims made later by CreBeau (numbers are often mistranslated from Korean because it's based on the 10,000 unit, not the 1000 unit like English)
  • JoongAng Ilbo is a reputable news source, so the phone interview claim is probably accurate.
  • The full text of the press release was widely reproduced on the net, and we found one news source for it. But, we'll definitely be looking for more originals - they've got to be out there.
  • The JoongAng Daily article consultant's interpretation of FTC requirements may or may not be correct and will later come under scrutiny. (link to come)
  • The consultant's quotes about standard income-sharing distributions is unverified.
August 3-6, 2009 - Korean media reacts to JJY's press conference
Mostly these just recap what was in JJY's press release.

Sources: Who Said What?
  • These are reactions to the JJY press conference
Reliability of Source(s)
  • You saw the original press release, judge for yourself. ^_~

August 3, 2009 - SM responds, claims TVXQ earned 11 billion won since debut

Sources: Who Said What?
  • JJY says: n/a
  • SM says:
    • TVXQ earned 11 billion won from debut through July 2009
    • SM operated in a deficit for four years after TVXQ's debut
    • TVXQ received high-end fashion goods and luxury cars
    • TVXQ were told of the physical hardships before they were put through them
    • FTC does not forbid contracts of over 7 years
    • Contract has been amended 5 times (includes details as to why)
    • TVXQ earns money from things besides just album sales
    • The lawsuit stems from the CreBeau involvement
    • SM wants to get this worked out ASAP
Reliability of Source(s)
  • SM definitely made these claims. It was all over the media.
  • No one is really in a position to speak about the truthfulness of the reported income. It's internal SM information.
  • It would be interesting to see possible reasons for WHY SM operated at a deficit. I can think of many.
  • SM's interpretation of FTC requirements may or may not be correct and will later come under scrutiny. (link to come)
  • SM does not say where the high fashion goods came from. Were they designer-donated? Also, the boys have claimed in the past that they often buy the fashions they are asked to model. (need sources, I'm just going from memory here.)
  • JJY later claims the cars are owned by SM, not by TVXQ members.
  • All numbers can be portrayed in many different lights, and it's hard to get a full idea of a situation from just flat numbers.
  • When speculating the morality of these numbers, as many fans are wont to do, it would be beneficial to compare them to what other similar performers around the world get paid for similar activities.
August 4, 2009 - JJY addresses SM's 11 billion won claim

Sources: Who Said What?
  • JJY says:
    • SM is trying to make us look bad - grrrrr!
    • Even if we accept the 11 billion won figure, that's only 200 million won per member. WTF is that about?
    • The members feel like the Great Wall of China is now between them and SM, and feel they can't turn back
    • Our official rebuttal will be presented in court
  • SM says: n/a
Reliability of Source(s)
  • No one is really in a position to speak about the truthfulness of the reported income. It's internal information.
  • All numbers can be portrayed in many different lights, and it's hard to get a full idea of a situation from just flat numbers.
  • When speculating the morality of these numbers, as many fans are wont to do, it would be beneficial to compare them to what other similar performers around the world get paid for similar activities.

August 4, 2009 - Jaejoong's Twitter is fake
Well, no shit.

Sources:
Who Said What?
  • n/a
Reliability of Source(s)
  • You should have been able to figure this out already without a news article.
  • However, if you still have doubts, JJY state very firmly they will not make any statements except through their lawyer (see below).
  • By the way, that goes for his Facebooks, those other Twitter accounts, his MySpaces, and his Livejournals, too.

August 3-7, 2009 - JJY will speak through only Sejong, period
The basic point of these articles is to say that JJY will not be holding further press conferences or making further statements, and will speak only through their legal representatives at Sejong. Short version? Don't believe anything unless it comes from Sejong. Also, a mention of some fake social media episodes.

Sources:
Examples of Stories attributed to "associates" & other possible fakery:
Who Said What?
  • JJY says: all of our statements will come through Sejong, period. Not from associates, not from people claiming to be us.
  • SM says: n/a
Reliability of Source(s)
  • The SPN Daily article about Changmin and Yunho makes very wild claims. Lots of "apparently" such-and-such feels a certain way, references to "associates", etc. A really bad article. Take anything in it with a grain of salt.
  • We have no idea if JJY changed their phone numbers, but the claim in this article comes from an "associate". It could certainly be propaganda, since an action like that might make them look overly-secretive, snobby, or as if they're being intentionally isolated/manipulated to some readers.

August 5, 2009 - SM attempts (again) to copyright "TVXQ" and other SM artist names
SM is attempting to secure the copyright to various incarnations of TVXQ and its members' stage names, as well as those of other SM artists. This isn't the first time they've made such an attempt. SM winning the rights to the name would prevent the members from calling themselves TVXQ without SM's permission.

Sources: Who Said What?
  • n/a
Reliability of Source(s)
  • This appears to be publicly-available information that anyone can dig up, so the article should be reliable
  • The mods have no idea how long this process takes and/or if a decision has been made on these applications
August 6, 2009 - TVXQ perform in Japan, further dispel disbandment rumors

Sources: Who Said What?
  • n/a
Reliability of Source(s)
  • Asahi Shimbun, to whom these quotes were attributed, is a leading newspaper in Japan. However, I can't yet find this article in their online archives.

August 7, 2009 - SM cancels SMTown 09 concert (link to topic thread coming soon)

August 9, 2009 - SM claims 6:4 income division ratio with TVXQ
The MBC program "Current Affairs Magazine 2580" aired claims by SM Entertainment regarding the alleged income split ratio with TVXQ. The mods have not seen this program so are unsure if these are numbers SM gave MBC or what.

Sources: Who Said What?
  • JJY says: Earnings are not transparent
  • SM says:
    • TVXQ pulled in 49.8 billion won: 22.4 billion went to SM to recoup their investment; of the remaining 27.4 billion profit, 11 billion went to TVXQ, 16.4 billion went to SM (4:6 ratio)
    • TVXQ receives profits from overseas promotions, overseas events, and commercials in a 7:3 ratio (TVXQ receives 70% of profit)
    • 13-year contract was to accommodate establishment in overseas markets: 3-4 years Korea, 3-4 years Japan, 3-4 years China
Reliability of Source(s)
  • Unsure where MBC got these numbers
  • The important thing to keep in mind here is this is based on net, not gross, and it's unclear how SM defines "net"
  • Later investigative journalism shows SM is "double dipping" in TVXQ's Japanese earnings; that 70% they get is not calculated from the entire net, but only a small slice of it (link to come)
August 14, 2009 - Court accepts TVXQ's preservation of evidence request
The court demanded that SM hand over all relevant documents regarding TVXQ's income.

Sources: Who Said What?
  • n/a
Reliability of Source(s)
  • This is confirmed, as it is referenced in many later articles.

Chronologically, the next section begins with the August 21 court date, under a new topic thread.

lawsuit

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